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1 https://wordpress.org/?v=5.4.1As Coal Mining Continues, What Does Bankruptcy Mean On The Ground?http://insideenergy.org/2016/03/05/as-coal-mining-continues-what-does-bankruptcy-mean-on-the-ground/
http://insideenergy.org/2016/03/05/as-coal-mining-continues-what-does-bankruptcy-mean-on-the-ground/#commentsSat, 05 Mar 2016 15:23:31 +0000http://www.insideenergy.org/?p=2887Peabody Energy is one of the largest coal companies in the world and operates mines all over the United States. But some of its senior lenders are now recommending bankruptcy, as the company faces potential defaults on several loans.

If the coal giant goes under, it would be the latest in a string of major producers to file for Chapter 11. Two of country’s biggest coal companies, Arch Coal, and Alpha Natural Resources, have both filed for bankruptcy in the past eight months.

But if you drive through Wyoming’s Powder River Basin, an area that produces around 40 percent of U.S. coal, dynamite blasts still shake the earth and miners in gigantic trucks are still scooping up coal. In fact, according to data compiled by S&P Global Market Intelligence, during the fourth quarter of 2015, around 36% of all coal produced in the state was mined by companies in bankruptcy.

So what does bankruptcy actually mean?

It doesn’t mean that a business just shuts down. In Chapter 11 bankruptcy, a company develops a reorganization plan that allows it to stay alive and pay back some of its debts over time.

“Out of hundreds of deals that I’ve done, hundreds, on four occasions, I’ve taken advantage of the laws of this country. Like other people,” Trump said during a Republican presidential debate in August.

Last year, nearly 25,000 businesses filed for bankruptcy in the U.S. Of that number, some 6,000 were Chapter 11 reorganizations.

According to data from S&P Global Market Intelligence, central Appalachia lost around 19 percent of its coal mining jobs last year, while Wyoming jobs dropped by just 1.5 percent.

But coal’s financial struggles have a broad impact in the state.

Leigh Paterson / Inside Energy

Jean Wagner was a plant operator at one of Peabody Energy’s coal mines up until a few years ago.

“I’m very worried about what’s going to happen. Because coal mining has done a lot for the communities and it’s done a lot for the people who work at them. We raised our kids. We put them oldest one though college. It was a very good living for us for a lot of years,” said Jean Wagner, a retired coal miner from Gillette, Wyo., said.

“When it comes to bankruptcy, the ones that lose the most are the workers and the retirees,” said Cecil Roberts, president of the United Mine Workers of America.

“Some of the miners who have retired, everything that they’ve earned over a 40 or 50 year career is at risk here. I find that to be terribly tragic,”

A few years ago, Patriot Coal, a spinoff of Peabody Energy, tried to cut benefits for thousands of unionized workers. After many rounds of negotiations, Patriot’s estimated $1.3 billion dollars in accrued benefits were reduced to a pool of just $400 million dollars to fund ongoing healthcare costs. That future of that account is now in question because Patriot declared bankruptcy again in May.

“I think there is a very significant potential problem and risk to the taxpayer with the pretty high profile bankruptcies that have taken place recently with coal companies,” said Secretary of the Interior Sally Jewell at a recent Senate hearing, answering questions about mine cleanup.

Reclamation costs are potentially another huge impact of a failed coal company.

Major bankrupt coal companies in Wyoming have hundreds of millions of dollars in cleanup liabilities. These are among the many debts being dealt with in bankruptcy court. Ultimately, the hope is that the companies will emerge from bankruptcy and be able to put up cash or surety bonds for those reclamation responsibilities.

Although bankruptcy can have serious consequences for coal dependent communities, shutting down completely is seen as worse.

“From our point of view, we want coal companies to continue to operate because a viable coal company is the one that is best at reclaiming the land,” said Pat Sweeney, senior advisor at the Western Organization of Resource Councils.

Negotiations are ongoing between bankrupt coal companies and their creditors over which debts will be paid back, by how much, and in what order. But, at least in one recent case, there’s one obligation that seems likely to be paid. In January, a bankruptcy judge approved up to $12 million dollars in bonuses for executives at Alpha Natural Resources.

Editor’s Note: On March 7th, this story was updated to reflect the most recent coal production data compiled by S&P Global Market Intelligence.

What’s Next:

For more on the issue of coal mine reclamation, check out my story about a little something called self-bonding.

So why is the coal industry in such poor financial health? Watch Inside Energy break it down.

Which counties lost the most coal job this past year? S&P Global Market Intelligence maps these changes.

]]>http://insideenergy.org/2016/03/05/as-coal-mining-continues-what-does-bankruptcy-mean-on-the-ground/feed/2Oil And Gas Jobs Dip, But Not As Low As During Recessionhttp://insideenergy.org/2015/07/02/oil-and-gas-jobs-dip-but-not-as-low-as-during-recession/
http://insideenergy.org/2015/07/02/oil-and-gas-jobs-dip-but-not-as-low-as-during-recession/#commentsThu, 02 Jul 2015 22:59:08 +0000http://www.insideenergy.org/?p=2179Oil prices fell off a cliff this winter, plunging from over $100 a barrel in June 2014 to under $50 in January 2015. We read reports that tens of thousands of oil workers had lost their jobs, but because the oil and gas industry is seasonal by nature, especially in frigid energy states like Wyoming and North Dakota, it was hard to figure out which component of the layoffs was seasonal and which was caused by low oil prices.

But now it’s summer, the time of year when the oil and gas industry should be humming along and re-hiring all those winter-idled workers. And looking at the data, it’s easy to see that there aren’t as many oil and gas extraction jobs, which includes things like drilling, as a year ago (for the full definition of what falls under oil and gas extraction, see here). As of May 2015, nationwide there are 193,000 workers, down from 196,000 a year ago, which you can see in this graph.

Oil and gas support activities, which includes things like cementing oil wells and fracking (see full definition here), employ even more people than extraction. It’s also a more volatile sector — in April 2014, there were over 317,000 oil and gas support jobs. In April 2015, there were 308,000, which you can see below.

Emily Guerin

There were 9,000 fewer oil and gas support jobs in April 2015 than in April 2014.

It’s worth noting that both oil and gas extraction and support activities employ more people today than they did during the heart of the recession. In May 2015 there were 193,000 oil and gas extraction workers; in May 2010, there were 158,000. On the support side there were 308,400 in April 2015 compared to just 191,400 in April 2010. Employment is even still higher than when the boom was ramping up in 2011-2012.

That’s the big picture. But what about in individual oil and gas producing states? Let’s start with Texas, the number one oil-producing state.

Texas’s oil and gas extraction job curve looks pretty similar to the nationwide extraction curve, doesn’t it? That could be because Texas is the number one oil-producing state with the largest oil and gas workforce. Job numbers there are barely lower than they were at this time last year: 100,600 in May 2015 compared to 101,000 in May 2014.

Now let’s check out Alaska. Oil production there has been falling since the late 1980s. But the state has been adding oil and gas extraction, well-drilling and support jobs since 2005 (which is as far back as this dataset from Bureau of Labor Statistics goes), although at a notably slower rate since the Great Recession. There are slightly more oil and gas workers in Alaska in May 2015 than the same time last year.

Emily Guerin

Oil and gas employment in Alaska has held fairly steady over the past year.

Not every state has data on the number of jobs in the oil and gas sector alone; it’s often lumped together with mining and logging. North Dakota is one of those states. But it’s still worth looking at the nation’s number two oil-producing state, where coal mining jobs have been relatively stable but oil and gas jobs have sky-rocketed in the past decade (North Dakota is one of the least-forested states, so there’s not really a logging industry).

Emily Guerin

North Dakota’s oil and gas, mining and logging sectors lost 4,300 jobs since January. There are 900 fewer jobs in May 2015 than in May 2014.

Jobs in the mining and oil and gas sector have fallen off steeply in North Dakota since the winter, down 4,300 from January to May. It’s worth noting that in the past few winters, the number of jobs in May has been higher than in January. This year, seasonal hiring hasn’t picked back up like in years past.

To get a sense of what we might expect to see in the future, I talked to Mohsen Bonakdarpour, an economist at IHS. He is expecting job losses to continue throughout this year and turn around sometime in 2017.

“Oil prices have recovered and stabilized. They’re not constantly going down,” he said, “there is hope in the future.”

Ivan Pettigrew (left) helped his stepson, Ray Stewart (right), get his first job when he moved to Wyoming from Louisiana in 2010.

Over the last few years, Wyoming’s African American population has grown faster than in any other state. According to census data, between 2010 and 2013, the number of black residents doubled. In some counties, especially those with a lot of energy development or tourism, that increase was more like 300, 500 or even 800 percent. Other rural Western states, all with unemployment rates well below the national average, are experiencing a similar trend.

According to Wenlin Liu, Principal Economist with the state’s Economic Analysis Division, the shift in Wyoming and North Dakota particularly, is largely due to the oil boom of the past few years which created oilfield jobs as well as a need for more people to work in related industries like restaurants and hotels.

“Wyoming’s population growth and decline, it is mostly driven by employment. We are different from Arizona or Florida. People go there to retire. Most people really come to Wyoming for employment purposes,” Liu said. “That’s why during the boom, they move here. When Wyoming’s job growth declines or slows down, many of them move out.”

I met Steve Marsh and his two kids in a park near where they live in Gillette, an energy town in northeastern Wyoming. Marsh is juggling a sleeping toddler and a three year old tugging on his free arm, who is talking non-stop about going on the slide. Later on, his friend Ray Stewart and his daughter join us, along with Stewart’s step-dad Ivan Pettigrew.

All three men moved here for work. Marsh from Chicago, Stewart from Shreveport, and Pettigrew from Atlanta. Marsh and Stewart work in the oilfields and Pettigrew is a janitor at a coal mine. The transition from urban, mostly black neighborhoods, to rural mostly white Wyoming, has been hard at times.

“When I first got here, if every time you stepped into a restaurant, you feel five, six, seven, eight eyes on you and then you look back and they look away and then other people from the table are still looking. It’s uncomfortable, to say the least!” Marsh said.

Stewart deals with the looks head-on: “If you stare at me long enough, you’re gonna be my best friend! It’s gonna happen. Whether you want it to or not!”

Are you a teacher, or do you want to share the issues in this story with a young person in your life? Check out these educational resources prepared by PBS NewsHour.

Pettigrew said people here are generally helpful and pretty friendly. He has found the same in other states where he has gone for work. Not everyone, of course. When I met him at his apartment earlier that day, I was greeted by a neighbor’s pick-up truck flying two confederate flags.

As of 2013, there were only an estimated 9,182 African Americans in the whole state. But that is up from 4,389 in 2010. During an energy boom, the state’s population generally increases and goes back down during the bust. But one of the factors that could make this population change more permanent is children.

“People with kids and families, even in a slowdown they’re probably trying to stay here,” Economist Liu said. “It’s not easy to move.”

Leigh Paterson / Inside Energy

Steve Marsh moved to Wyoming for work but says he is staying for his son (pictured here) and daughter.

According to census data, between 2010 and 2013, the number of African American children in the state under the age of ten grew by over 40% while the number of white children remained steady. So while African Americans still make up less than 2% of the state’s total population, these days, there is more of a community.

But Pettigrew explained the jobs that attracted so many new workers are not as plentiful as they used to be. According to the U.S. Bureau of Labor Statistics, Wyoming lost around 1,500 mining and logging jobs between December and March.

“In 2009 and 2010, you could basically lose your job one day and start working again the same day or the next day! Now its not that easy,” Pettigrew said.

So I asked the two younger men, if the jobs went away, would you stay?

Steve said probably not. He is more of a city guy. But he conceded, his priorities have changed. “To be quite honest, I’m here for my children now.”

Stewart, however, was unequivocal. “I would definitely stay. I like the community. Within the five years I’ve been here I met my wife. I like it here.”

A job seeker fills out an application at the oilfield job fair in Williston, North Dakota, on March 11, 2015.

The news from the oil patch has been doom and gloom in recent months. Oil prices are at a six-year low, and there’s been tens of thousands of layoffs around the country. But a more complex picture emerges at an oilfield job fair in Williston, North Dakota, the heart of the Bakken oil boom.

An hour or so before the job fair began, the Grand Williston Hotel was already crowded with men in work boots and jeans. At 3 p.m., they flooded in and began chatting with recruiters and furiously filling out job applications at the hotel bar. Some stood still amidst the chaos, pecking away on smart phones. That’s what Tyson Kidder was doing when I interrupted him to ask what brought him to the job fair today.

“Unfortunately there was a layoff at the position I held most recently on Friday,” he said, as a technician installing sensors on drilling rigs. It is companies like Kidder’s, on “the exploration side,” in industry speak, that have been hit first in the oilfield slowdown. Companies like Halliburton or Weatherford that assist in the fracking of wells, and the oil companies like Marathon Oil that hire them for their services, have had thousands of layoffs.

But there are still over 12,000 active oil wells in North Dakota alone that need truckers to transport their oil and wastewater and maintenance mechanics to fix them when they break down. That’s why Kidder is leaning towards jobs on the “production side.” Still, he’s a little nervous about, “getting a position that pays enough to cover my bills and the goals I have.” To do that, he says, “you have to hit the upper end of the jobs that are out here.”

And there’s the catch. There are still a lot of upper end oilfield jobs, but they’re harder to get.

“The positions in the oilfield are now more competitive. You have to have a skill,” says Cindy Sanford of Job Service North Dakota, the government agency that put on this job fair.

The recruiting table at Adler Hot Oil is a good place to understand what’s changed. They’re hiring for “hot oil operators,” guys who drive big heater trucks out to wells to heat oil or water as needed for maintenance operations or fracking.

Hot oilers get paid $18-20 an hour, and most take home somewhere between $70,000 to $100,000 dollars a year with the overtime, up to 100 hours a week. At the height of the boom, you could show up in the Bakken with little oilfield experience, without a commercial driver’s license or CDL, and still get hired at places like Adler. Not any more.

“You’ve gotta have your CDL,” I hear recruiter Amy Shelton telling a job seeker at her table. “If you can get your CDL, come back and talk to us.”

That job seeker aside, Shelton says most people do have CDLs these days.

“The last job fair I came to there were a lot less people and a lot less qualified people,” she says.

Now, they’re hiring guys laid of by Halliburton, guys with lots of experience who wouldn’t ordinarily work for places like Adler. Until now, that is.

That makes it harder for less-experienced workers like Rex Williford to compete.

“If I wanted to get a job right now today, could go to a gas station or a grocery store and they’ll hire me,” he says. “But as far as the oilfield job, it might be a little harder to get one cause everybody wants one.”

Oilfield employment is seasonal, with job openings spiking in the summer and plummeting in winter as drilling and construction activity slows due to bad weather. But the number of job losses between June 2014 and January 2015 stands out as an especially large reduction, perhaps due to falling oil prices.

That’s good news for the one group benefitting from the slowdown: non-oilfield employers like the U.S. Postal Service, Dairy Queen, or construction companies. At the height of the boom, a lot of them had a hard time paying enough to keep low-skilled workers.

Cindy Sanford of Job Service North Dakota says her agency is a perfect example.

“I mean, maybe I’ve had a week where we had a full staff?” she says. “By next week I think we’ll be fully staffed. Hopefully.”

Williston’s sub-two percent unemployment rate is a sign that there’s still a labor shortage here. Still space for newcomers like Leah Ann Kleber to carve out a life for themselves. Kleber recently moved here from Miami, where she found it hard to get started in sales and marketing. She and her husband heard about Williston on television and, in December, decided to come up and see for themselves. In early March, they packed everything into a U-Haul and drove up, making it here just in time for the job fair.

“This town gives you the opportunity to really pursue your dreams,” she says. “It’s new, it’s fresh, and I want to be a part of that.

There’s hope that drilling and fracking in North Dakota might pick up in June, when a massive oil tax break kicks in triggered by five months of sub-$55 oil. In the meantime, officials here are hoping people will keep coming for the twenty thousand open jobs state-wide. There’s even a campaign to recruit them called Find the Good Life in North Dakota.

Apryl Boyce was a hot shot driver for Badlands Service Group in Williston, North Dakota.

In the past few years, workers from all over America have flocked to jobs in the booming oil industry. For a lot of people struggling through their own hard times, it’s an opportunity for a second chance, and for some its their last resort. But since summer 2014, oil prices have dropped by half. Some 75,000 oil workers nationwide have lost their jobs, and more have had their hours cut.

Apryl Boyce is one of those workers. She’s 42, tall, tough-looking and pretty, with long blond hair tucked beneath a crocheted beanie. She came to the Bakken last fall, and has spent months driving a one-ton truck all over the oilfield, at all hours of the day, as a hot shot,a driver who hauls equipment from one job site to another. Recently, things have slowed down a lot.

“It used to be you’d get called out at 4:00 in the morning and be doing runs until 10 at night,” she said.

At the office of Badlands Service Group, the small oil field company Apryl works for, owner Jim Levasseur said his workforce is 40 percent smaller than it was a few weeks ago. He’s been cutting people’s hours — and then a lot of them quit.

“They’re wanting 60 to 80 hours a week and if they’re only going to get 40 hours a week they’re going to go home,” he said. “It may not be as much money, but at least they’re home every night and not sacrificing.”

Given how dangerous the oilfield is, Jim said he doesn’t blame them for leaving. “People get killed up here on a weekly basis. These are the worst conditions I’ve ever seen for working.”

Safety is only part of why Apryl is leaving. Her unpleasant housing situation is another major contributor. A week ago, Jim combined employee housing to cut costs. He asked Apryl to move in with 11 young men in a tired old ranch house on what used to be the outskirts of Williston (it’s now hemmed in by new apartment buildings).

“I try to wear bulky pajamas and heavy sweatshirts and try to be as unattractive as possible,” she said. “Because I don’t want to provoke any unwanted comments.”

But there’s another reason, a deeper reason, why she decided to leave. Ten years ago, her mother died. At that time Apryl sold everything she owned (except a storage unit full of her mother’s cookbooks) and began bouncing from job to job: oilfield trucker in Colorado, cattle ranch cook in Wyoming. She was running, she said, from anything she used to do, anything that made her feel like herself — until she got to the Bakken.

“It took the absolute grungiest, dingiest, darkest part of life to make me realize you can stop running,” she said.

The oilfield slowdown has given her a chance to pause. To think about what brought her the Bakken, and what no longer keeps her there.

“I lost myself in the oilfields,” Apryl said. “I lost myself chasing money for all the wrong reasons, and I’m not going to let it happen again.”

Two days later, Apryl left Williston for a mountain town in Colorado she had talked about a lot. She’s running again, but this time to a place that feels like home.